Tag: Economic Development

“You have to make a long term plan for diversification, but it doesn’t happen overnight. It’s important to commit to the reinvestment necessary to accomplish your goals so you are not bleeding enterprises dry while on the path. [It’s] critical to continually educate the leadership and community about the plan and how it’s progressing.”

Tribes with significant gaming initiatives and related businesses can find themselves bombarded with myriad offers, opportunities and potential scams. Throughout Indian Country, many tribal leaders are often faced with a stack of business plans―from family and friends, as well as unsolicited proposals from off the reservation―awaiting their attention.

For tribal nations with an eye toward the future, dealing with the sheer number of opportunities can present a number of challenges, including wasted resources, implementation of projects that simply don’t work and stasis in decision-making. Taken together, these challenges can inhibit growth in Native communities.

With a thoughtful, well-organized Strategic Planning Work Session, however, tribes can follow a structured, objective process that can help align their internal goals for diversification with long-term sustainability that is crucial to maintaining governmental and economic stability.

Most tribes, says BSSG president John Mooers, are very cognizant of the importance of developing and implementing a viable plan that works―regardless of whether they are located near urban or rural areas. And depending on what a particular tribe’s needs are, BSSG has planning solutions for tribal governance, its business operations, or both.

“We have worked with tribes that spent many years and a lot of money on projects and initiatives that had produced no equitable results,” says BSSG President John Mooers. “So we set up a two-day work session to assess where they are and we go over what did and didn’t work for them. We review government documents, by-laws and ordinances and interview stakeholders, including the tribal council and economic council board members.”

Over the two-day work session, BSSG identified their top priorities and their existing resources to create and a practical, step-by-step action plan that can help them move in the direction they want to go, says Mooers.

Mooers says that it’s important to note that there are no absolute answers that apply to all of Indian Country. Each tribe has its own unique needs and goals, and enterprises that look profitable for one tribe might not look as promising for another. Therefore, it is vital to never assume that that a strategic plan developed for one tribe would apply to another.

“Our work sessions are a very effective cost benefit for tribes whose economic growth has stagnated or started to decline,” says Mooers. “Our strategists always take detailed notes so that we are able to fully assess where the opportunities and challenges lie. Afterward we can bring real-world options to the table in creating workable solutions.”

One key aspect not often considered by tribes, for example, is how diversification will impact risk/return potential and job creation as a part of an overall business strategy. This concept, known as portfolio management, is a simple and powerful tool that helps leaders focus on the entirety of the tribal economic and financial picture, not just viewing single investments as isolated decisions.

“As we all know, governments don’t make money, they spend money,” says Mooers. “So a lot of what we’re doing in Indian country is creating job opportunities and efficiencies in their enterprises to generate the profits and tax revenues necessary to fund the government, which in turn increases its ability to provide services to its members.”

Mooers says that while the Strategic Planning Sessions are two-days, BSSG also has buildable solutions for assessment, planning and implementation for a wide array of concerns, including governmental, business development, housing, healthcare, and more.

“Our work sessions are very effective at identifying and establishing a strategic action plan that is tailored to meet the specific needs and goals of a tribal nation,” says Mooers. “But we can also build a comprehensive plan that can help build a stable government with a growth economy.”

In May, the President released his proposed budget with major cuts that will directly impact tribes across Indian Country. And as the growth of Indian gaming has begun to slow, now more than ever tribal governments should be focused on diversifying their portfolios as a means to build stronger and more sustainable economies over the long term.

“Gaming has provided a lift for many Tribes for many years, but the reality is that it hasn’t provided enough revenues to address the many challenges that confront most tribal communities, nor has it supported the growth of tribal economies beyond the casinos,” said Jamie Fullmer, Chairman/CEO of the Phoenix-based Blue Stone Strategy Group. “The gaming industry has been more successful for some than for others, but it is clear that now is the time for all Tribes to focus attention on diversification into other businesses to provide steady revenue streams and creating more tribal jobs.”

The National Indian Gaming Commission (NIGC) reports that Indian gaming revenues began leveling off at around 2007 at $26.1 billion and has had only incremental increases in the last decade, indicating that the industry’s major boom period may have peaked.

Fullmer says that successful diversification depends on several factors, including tribal leadership, community commitment, geographic location, infrastructure capacity,adaptability in strategic planning and land use initiatives.

“The initial step for tribal leaders diversifying their economy involves gaining an understanding of their Tribe’s particular competitive advantages, the available local and regional economic assets, and access to capital beyond gaming revenues,” said Fullmer. “Armed with this understanding, tribal leaders can then effectively deploy the various diversification theories that are in accordance with their particular goals and opportunities to achieve long-term job creation and economic growth.

“It is critical to study the local market and workforce, understand the needs and wants of the area beyond just the tribal community and evaluate the potential opportunities in a particular location and then develop action oriented strategies based on the current reality of the area not just the potential.”

Most Tribes find themselves in one of two situations, said Fullmer. They are located near a relatively large metropolitan population, or in a relatively rural, isolated location where gaming operations and ancillary businesses are based on destination resort models or on capturing customers who travel through or near the reservation on major highways.

Opportunities available to tribal nations with little acreage tend to focus on creating retail and service-oriented enterprises that do not require square footage. Comparatively, Tribes with vast reservations often contain one or more marketable natural resources and agricultural opportunities that can―if chosen by tribal leaders―be leveraged for economic development purposes. While Tribes can have both rural and urban attributes, the options for diversification differ depending on the cultural fit, demographics, and community support in a particular tribe’s situation, said Fullmer.

In general, Tribes tend to fall into one of four categories: Those near metropolitan areas; rural tribes situated on high-traffic corridors; those isolated with natural resources and agriculture; and those who are isolated without natural resources.

“Naturally, Tribes near large metropolitan areas usually have a strong infrastructural and economic advantage, left to solve the straightforward challenge of capturing an adequate piece of the purchasing power of the existing customer base in those areas,” he said. “While Tribes in rural areas, particularly in the western United States, have rural isolated reservations that are not near any major population centers or high-traffic corridors.”

To overcome these challenges, Fullmer advocates for developing a strategy that leverages the Tribes’ sovereign rights and advantages, that looks at both on and off reservation opportunities outside of gaming and toward human and natural resources and to capitalize on the economic opportunities that tribal leaders may sometimes overlook.

“Blue Stone’s goal is to help tribes to evaluate and plan their own unique diversification program to what they believe is best for them, both culturally and economically,” said Fullmer. “But there’s no question that Tribal Nations need to move beyond gaming and establish a secondary, more refined approach in achieving diversification. We have worked very hard over the last decade supporting our Tribal clients in diversifying their economies by combining our respect for the uniqueness of each tribe’s culture and history, providing proven tribal methods and perspective, while pairing them with best practices from Indian Country and the corporate world.”

The economic development opportunities on reservations that feature predominantly trust land are fundamentally similar to that of large, master-planned land-use programs.

The genesis of Indian Gaming is well-documented in terms of how it was based on the unique and recognized sovereignty of American Indian tribes in relation to their state and municipal counterparts. What began as bingo nights in church basements with an all-volunteer staff, eventually morphed into a $28 billion a year gaming industry. The impact of gaming on Native communities is incalculable and nothing short of miraculous. But gaming is only one part of a multi-faceted strategy to bring long-term financial stability to Indian Country.

Now, more than ever before, it is crucial to continue developing a progressive, diversified portfolio that allows tribes to spread the risk and develop business ventures that will translate into jobs and economic security not only for tribal governments, but also for their tribal members. The ability to provide meaningful, full-time employment in the multitude of fields and professions that are necessary for the day-to-day governance, human needs, education and well-being of tribal members is one of the most important benchmarks for tribal self-sustainability in the foreseeable future.

In the beginning, tribes did not have a lot of managerial or even financial expertise regarding the complexities and sophistication of the gaming industry, which had a global market presence. Most tribes reached out to the industry, primarily in the Las Vegas market, for assistance and entered into Managerial Agreements. Often these agreements included assistance in accessing capital since the tribes had limited ability to secure financing or obtain credit on their own.

Initially, tribes needed government approval of expansion projects, business investments or new business ventures, but today this is no longer required leaving the tribes free to diversify and manage their assets as they see fit.

Today, tribal leaders recognize the fact that they cannot depend on unlimited expansion of their casino operations. They see the finite capacity of casino development, as the revenues have begun leveling off in the last five years. Even the commercial gaming industry in Las Vegas and—in particular—Atlantic City have realized that they need to diversify revenue sources to balance their revenue base if they are going to survive.

So where does this leave the tribes? With an opportunity to learn from their successes and failures and find a path to growth and job creation in their communities.

Faced with the challenge of building sustainable economies over time, tribes across the country are taking steps to diversify their economic activities. Emerging from these efforts are examples illustrating a spectrum of potential opportunities, ranging from traditional gaming-related amenities to initiatives designed to apply other in-house capabilities to the development of successful non-gaming enterprises.

The first step to tribal diversification involves gaining an understanding of unique competitive advantages, the available local and regional economic assets, and where potential new dollars beyond gaming can come from. Armed with this understanding, tribes can effectively deploy the various diversification theories in accordance with their particular goals and opportunities to achieve economic growth. Other areas of consideration include zoning issues, potential land purchases, and taking land into trust, among other requirements. While these are not “deal breaking” impediments, they need planning and cooperative agreements with other governments.

The natural expansion of Indian gaming led to increasing the destination aspect of casinos. Hotels were built to accommodate gamers, but were also used as convention venues for scores of other businesses that were primarily interested in the capacity of the facilities for their meetings, and little to no interest in the casinos. Many tribes also developed golf courses, spas and outdoor recreation areas for their membership, their workforce and visitors. Investments included developing independent small and large businesses on the reservation for tribal members and others.

Like most significant endeavors, the first step in a tribe’s diversification effort should be to assess the economic opportunities available to the tribe based on its particular location. The economic development opportunities on reservations that feature predominantly trust land are fundamentally similar to that of large, master-planned land-use programs. This means that in order to understand what’s economically possible, one has to understand the potential consumers, or customers, available given a tribe’s specific location. Naturally, there are multiple strategies that tribes can use to overcome their geographic limitations. For example, some tribes use a “destination” or “resort” model to attract customers from relatively distant locations for multiple-night stays in their casino. The key is to learn the potential opportunities a tribe can explore based on its particular location and economic geography, and then develop customized development strategies based on that reality.

Most tribes find themselves in one of two situations. They are near a relatively large metropolitan population, in which case they likely have developed gaming ventures to attract nearby customers. Or they find themselves in relatively rural, isolated locations, where gaming operations consequently are based on destination resort models or on capturing customers who travel through or near the reservation on major highways on their way from one metropolitan area to another. Tribes with land along a major highway or interstate are best situated, as they can still establish profitable gaming operations despite being relatively rural. Others find themselves in truly rural environments without easy access to major markets, and likely have small gaming operations typically frequented mostly by tribal members. At best, truly rural gaming tribes can build large destination resorts to which customers are willing to travel long distances and typically stay for multiple nights.

Determining which diversification path best suits a tribe’s particular needs depends in part on its geographical location. Opportunities available to a rural tribe tend to depend heavily on the size of its reservation and the natural resources it holds under trust. Tribes with little acreage usually have to focus on creating service-oriented enterprises that do not require square footage. Comparatively, tribes with vast reservations often contain one or more marketable natural resources that can—if so chosen by tribal leaders—be leveraged for economic development purposes. While each tribe is unique—one can have both rural and urban attributes—it is helpful to break down possible economic development opportunity sets into four categories: tribes near a metropolitan area, rural tribes on high-traffic corridors, isolated tribes with natural resources, and isolated tribes without natural resources.

The options for diversification differ depending on which category best describes a particular tribe’s situation. Recognizing that some tribes have multiple characteristics, the following articles will examine how the economic diversification opportunities for tribes are determined in each category.

What tribal leaders are saying about Blue Stone:

Match-e-be-nash-she-wish Band of Pottawatomi Indians of Michigan

Blue Stone helped the Gun Lake Tribal Gaming Authority with a feasibility study for a gas station/c-store. We found them to be very knowledgeable and prompt with their results.

-- John Shagonaby

, Chief Executive Officer

Tunica Biloxi Tribe of Louisiana

Blue Stone brought a wealth of knowledge and expertise to our organization while emphasizing the need of Unity and helping bring Our Vision to fruition.

-- Marshall Pierite

, Former Tribal Chairman

Twenty-Nine Palms Band of Mission Indians

Blue Stone performed a thorough analysis that resulted in giving us insight and information that we converted into action that is returning positive results.

-- Darrell Mike

, Chairman

Squaxin Island Tribe

Blue Stone offers a clear effective product that takes in the uniqueness of your situation. They are very complete in their analysis to better serve your needs and productivity in your businesses. It is well worth the investment. Blue Stone was well worth the investment. A direct result was a more dedicated and motivated workforce … Continue reading “Squaxin Island Tribe”

-- Ray Peters

, Intergovernmental Affairs/Council Liaison

Dakota Nation Development Corporation of the Sisseton Wahpeton Oyate

Blue Stone is a vital partner in your business network for native business success, privately or tribally owned.

-- DelRay D German

, Chairman

Nottawaseppi Huron Band of the Potawatomi

Blue Stone has a unique talent for analyzing resources so our Tribal Council could engage in a thoughtful dialogue to determine priorities.

-- Homer A. Mandoka

, Former Tribal Chairman

Seminole Tribe of Florida

The Blue Stone Team of professionals worked well with our Community Members and Executive Staff in developing the detailed recommendations for Council’s consideration.

-- James Billie

, Chairman

Ute Mountain Casino, Hotel & Resort

Blue Stone provided an unbiased perspective that our Council respected and was extremely professional and efficient in their assessment.

-- Bob Brooker

, General Manager

Seneca Nation

Utilizing Blue Stone helped us facilitate our priorities.

-- Tina Abrams

, Councilor

Mashpee Wampanoag Tribe

We appreciated their attention to detail and clear understanding of our community and bringing Accountability to our businesses. We have the honor of providing a competitive work environment which has resulted in attracting a talented workforce that is eager to work for us.

Results for Michigan tribe: Paid off loan completely in just three years.

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